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Jan 25, 2021

Tennessee state Rep. Bob Ramsey has introduced state legislation that makes delivery of alcoholic beverages by restaurants, hotels and other liquor by the drink licensees “permanent” — at least for three years. Download a copy of the legislation here. Upon a quick reading, the legislation appears to be modeled after Governor Lee’s emergency orders that legalized delivery during the pandemic

We hear Stevie Wonder’s catchy refrain:

Ooh baby, here I am

Signed, sealed, delivered, I’m yours, I’m yours

There is one notable departure from emergency delivery of alcohol. The legislation attempts to shield license holders from all “conduct” of a third-party delivery service driver. This would appear to be an effort to allow license holders to escape fines and suspensions for drivers delivering alcohol to minors and intoxicated persons, for example.

The proposed legislation does not contain any penalties for drivers that deliver to minors or otherwise violate liquor laws. Keep in mind that most restaurant delivery services do not hold any license with the ABC and are not required to provide any training to drivers for the delivery of alcohol. The ABC and beer boards do not have direct jurisdiction over these delivery services and their drivers.

The legislation also does not correct an apparent deficiency in the law for sale to minor stings using web and app ordering services. To place an order for alcohol, ordering services universally require a click-through that the individual placing the order is 21 or over. As we understand current law, an under-age law enforcement officer cannot lie about their age. An under-age cadet cannot legally place an on-line order for delivery of alcohol, preventing law enforcement from conducting routine age-compliance checks.

Stay tuned for more about the delivery bill and other legislation by subscribing to Last Call.

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Dec 26, 2020

Tennessee Gov. Bill Lee has extended the executive order allowing carryout and delivery of beer, wine and spirits for restaurants.

Restaurants, limited-service restaurants and wine-only restaurants can continue to sell carryout and deliver alcoholic beverages and beer. There is no additional license or permission needed to deliver.

Lee extended the privilege through to 11:59 pm February 27, which brings welcome certainty to an industry battered by the pandemic.

Lee continued the state of emergency for the longest amount of time under state law.  Health departments in Davidson, Hamilton, Knox, Madison, Shelby and Sullivan counties will retain the discretion to implement local restrictions, including mask requirements and capacity limitations.

Lee also extended remote notarization and witnessing of documents, and allowed government meetings to take place electronically, subject to certain transparency safeguards. This means beer boards and the ABC can continue to meet via Zoom and WebEx.

We urge folks to keep hustling during these difficult times and check Last Call for updates. The Tennessee ABC has posted FAQs about carry out and delivery here. 

Here is our summary of the rules of engagement for to-go, curbside, drive-through and delivery:

Alcohol must be delivered with food. At least one item of food must be sold in every order containing alcohol. The amount of food required is not specified, but given the emergency nature of this order, we encourage restaurants not to play games and count lime slices as food, for example.

Licensees are still required to be responsible. Restaurants can set rules, such as one entrée per two single-serving margaritas. You can always require that customers order a meal or set a minimum dollar amount of food for deliveries.

You can deliver cocktails! As long as the package has a secure lid, we read the order as allowing delivery of margaritas, cocktails and other mixed drinks.

Alcohol must be packaged in a container or bottle with a secure lid or cap. We read this rule to mean that the container must be closed. Closed is not the same as sealed. For example, a lid screwed on the top of a plastic jug is closed. Alcohol does not have to be sealed, meaning you do not have to attach seals like you would find on commercial products at grocery stores.

The ABC advises restaurants to “cover containers in a reasonable manner that would require the consumer to unpackage them for consumption.” For example, we believe a styrofoam container with a lid that does not have a straw hole will work. If all your lids have straw holes, tape the straw holes.

Bottles and cans of beer and wine can be delivered. This includes regular-sized wine bottles. No bottles of spirits or liquor.

Single serving packages only. Although beer and wine by the bottle may be sold, no other multi-serving containers are allowed. For purposes of single servings, the ABC says no more than 16 oz. of beer, 9 oz. of wine or 4 oz. of spirits in a container with not more than 16 ounces of total liquid.

No more carafes of sangria or pitchers of margaritas to-go. You can sell multiple single-serving containers with a meal, although we continue to recommend moderation under this emergency order.

Mini bottles of spirits present a conundrum. State law prohibits the sale of spirits by the bottle. However, Governor Lee’s order specifically authorizes “single servings of alcoholic beverages.”

In our humble opinion, Executive Order 30 allows a restaurant to deliver mini bottles of spirits, provided it is clear that the mini bottle is intended for a single serving. We advise folks to securely tape or otherwise attach a mini bottle of spirits to the mixer. That way, it is abundantly clear that the two items – the container and the mini bottle – are intended to be a single serving. Do not play games and toss 12 mini bottles of tequila in a bag and consider yourself in compliance with the order.

The executive order only applies to full-service restaurants, wine-only restaurants and limited service restaurants. Hotels, caterers, premier-type tourist resorts, convention centers and other special license types cannot deliver or sell alcohol to-go under the executive order.

Get your beer here. Restaurants do not need permission from their local beer board to deliver under the Governor’s order.

If you are a brewery, hotel or other business that does not hold a restaurant license, you can register with your local beer board to deliver beer in in Bristol, Chattanooga, Knoxville, Memphis and Nashville. These local beer boards have specifically authorized carryout and delivery of regular beer. There are broader rights for beer-only delivery and growlers are fine in these cities and any other city that has specifically authorized carryout and delivery of beer. Read more about beer delivery here.

Mandatory carding for deliveries. You must card. Sales cannot be made to under 21 or intoxicated persons.

Drivers do not have to physically touch an identification to verify age. Because orders are most likely paid in advance, online or via phone, there is no need for drivers to risk potential contamination and make physical content with the customer. Have the customer hold their own ID out for the driver to read. Or better yet, read it through a glass storm window.

That said, drivers need to ensure that they properly ID. We encourage Redbox carding and closer scrutiny of all Redbox IDs.

Drivers must be at least 21 years of age and have a valid driver’s license.

Delivery services can deliver your alcohol. Restaurants can use their own employees or third-party delivery services such as Postmates and Uber Eats to deliver alcohol. Delivery personnel are not required to have server permit cards or any special qualifications.

With a third-party delivery service, you should ensure that delivery personnel are properly trained for carding. Some delivery services are not set up to require carding.

Keep in mind that if you are using a third-party delivery service, your restaurant remains liable for sales to minors, intoxicated persons or the violation of any other law.  A restaurant will not be able to avoid liability by saying “the Uber driver did it.”

Restaurants must post a sign with the following notice: “No driver shall consume any alcoholic beverage or beer or possess an open container of alcoholic beverage or beer while operating a motor vehicle in this state.” Although the order is not clear, we advise folks to post the sign on the wall, with your liquor license.

Carryout and delivery of alcohol are limited to current operating hours, which is not defined. We advise folks to adhere to the normal sales hours for beer and alcoholic beverages.

Curbside and drive-through. The order does not specifically address curbside and drive-through, but given the intent of the order, we believe it is OK to deliver drinks curbside and through drive-through windows.

Do not stage alcohol pick up outside.Restaurants cannot stage multiple alcohol deliveries at tables outside the restaurant’s licensed premises. We understand that it is convenient for multiple orders to be brought out for immediate pickup at curbside. Although this is okay for food, alcohol must stay inside the restaurant until the customer or delivery service arrives for pickup. A licensed patio is fine for staging. But not your parking lot.

Alcohol must come from the restaurant’s inventory. A restaurant cannot buy or deliver alcohol from a retail liquor store, food store or another restaurant. You must purchase your alcohol from a wholesaler.

Collect sales tax. Restaurants do not collect the 15% liquor by the drink tax for all wine and spirits sold to-go or for delivery, including bottles and cans of beer, wine and single-serve cocktails. You do have to collect sales tax. Here is the post from Revenue. (link to attached). If you have more tax questions, see our post here.

Delivery applies to restaurants statewide, but we urge folks to exercise discretion and not deliver to dry towns and counties. We suspect that the Governor did not intend for delivery to areas that have not approved of liquor-by-the-drink.

Restaurants with dining privileges can serve alcohol for on-premise consumption. Just like a regular patron dining at a table, restaurants can serve alcohol to customers that are waiting to pick up carryout, provided that the restaurant’s dining room can legally be open. Tennessee restaurants were allowed to reopen for dining beginning April 27, except for the six counties in the state within independent health departments (Chattanooga – Hamilton, Jackson – Madison, Kingsport & Bristol – Sullivan, Knoxville – Knox, Memphis – Shelby and Nashville – Davidson), which are allowed to establish their own rules for reopening. In these cities, you currently cannot pour a beer or drink while guests wait on to-go orders.

Drinks must be ordered at the restaurant and cannot be taken off-premises. Either you order your drink to go – or for consumption at the restaurant.

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Nov 9, 2020

Nashville’s Metro Council passed legislation that makes the delivery of beer a permanent option for holders of an “On-Premises” or “On/Off Premises” beer permit.

We find ourselves humming the classic Adam and the Ants tune:

stand and deliver

your money or your life

The Metro Beer Board will begin taking applications on November 19. We understand that the application process is streamlined and staff can grant temporary approval. Applicants will have to pay a $250 application fee, plus $100 annually, which is pro-rated on a calendar basis for the first year.

Consistent with the emergency beer delivery regulation enacted at the outset of the pandemic, the Metro Beer Board has a pending Rule that will require that employees make all deliveries. During the outset of the pandemic, we saw beer delivery by employees as being pro-jobs, at a time when many hospitality industry workers were laid off.

Unlike state-wide emergency alcohol delivery, permit holders cannot use third-party delivery services such as GrubHub, Postmates, DoorDash and UberEats.

Of note, the Metro Beer Board was the first in the state to enact emergency beer delivery. Metro Nashville becomes the first Tennessee city to make beer delivery permanent.

Below are the complete regulations:

SECTION V – Delivery / Curbside Permits

Section 5.01 – Delivery / Curbside Permits

A. These following rules apply to existing holders of permits of “on” or “on/off” sale permits (a “Permittee”) issued by the Metro Nashville Beer Permit Board.  This Regulation does not apply to holders of off-sale permits.

B. Subject to all federal, state and local laws, a Permittee holding an “on” or “on/off” sale permit may make off-premise sales and deliver beer subject to this rule.

C. Prior to any off-premises sales being conducted, the Permittee must submit an application accompanied by a two hundred fifty dollar ($250) application fee for a delivery / curbside permit. Applicants may contact the Beer Board staff by phone: 615-862-6751, via e-mail at beerboard@nashville.gov or apply online.  The applicant must provide the following:

Name of the Permittee
Physical Address of the Permittee
Person to Contact
E-mail Address
Phone Number
On or on/off Premise Beer Permit Number

D. Upon providing the information above, and obtaining final approval by the Beer Board, the permit holder may make off-premise sales and deliver beer pursuant to these rules and subject to any applicable federal, state, and local laws. 

E. Only employees of the Permittee may deliver beer.

F. Employees conducting deliveries must be at least 21 years of age.

G. At the point of delivery, the employee conducting the delivery must inspect the purchaser’s valid identification to determine whether the purchaser is an adult and is not intoxicated, pursuant to T.C.A. § 57-5-301(a)(1).

H. The Permittee shall be strictly liable for all sales to persons under the age of 21 or to intoxicated persons, pursuant to Tennessee state law.

I. Beer to be delivered must be in commercially sealed containers.

J. These rules are limited to “beer” as defined in M.C.L. 7.08.010.

RULE 3.04 RESTRICTIONS ON DRIVE-THROUGH OR DELIVERY WINDOWS

Beer may be sold through any drive-through or delivery window or by curb service only by those retail establishments possessing a delivery/curbside permit. 

RULE 3.05 RESTRICTIONS ON DELIVERIES

A permittee may deliver beer from a business establishment to the home or any other location of the consumer where the sale and delivery of beer and/or other goods are made simultaneously at the location of the consumer, so long as the permittee possesses a delivery/curbside permit.

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Sep 24, 2020

We have seen a steady uptick in citations for sales to minors from the Tennessee ABC and beer boards across the state. We encourage folks to re-focus training efforts on carding and to adopt the program we call “Red Box ID.” 

Here are two samples of Tennessee under 21 drivers licenses.

Under 21 drivers licenses have a big red box around the photo – hence the name “Red Box ID.” 

Problem is, Red Box IDs have a defect. The licenses do not expire when the driver turns 21. Under 21 licenses with Red Box ID can be valid for years after the driver turns 21. 

Red Box Carding.

The good news is that Red Box IDs do not require math for carding.

The date the person turns 21 is written in the red box around the photograph. In the first sample, Nick turns 21 on 02/11/2021.

Viola – no math!  Don’t serve Nick.

Law enforcement almost universally uses real Tennessee drivers licenses in sale to minor stings.  In all likelihood, your server or clerk will be presented a Red Box ID when the ABC or Beer Board visits.

Make sure your staff is properly trained to focus on Red Box IDs – read the date in the red box.

Ask the customer’s age. 

We also recommend that servers, bartenders and clerks ask the guest “How old are you?”

Undercover officers, such as an ABC agent, may avoid answering the question. It is unlikely that the officer will lie. Ask the question again, if the person is evasive. Refuse the sale if the person will not tell the correct age.

Secondary card. 

Do not allow staff to sell to anyone with a Red Box ID.  Although servers, bartenders and clerks should card the patron, consider requiring a manager or senior staff member approve all sales involving Red Box ID. 

Double-checking the ID for under 21 drivers licenses significantly decreases the chance that an establishment will serve a minor. This includes confidential informants acting on behalf of the ABC, beer boards or police.

ABC enforcement. 

The ABC has recently begun issuing administrative citations to servers and cashiers that fail age compliance checks.  The ABC has been fining servers and cashiers $250.

The ABC reported at the September meeting that 16 servers had been fined $250.

We welcome this change in policy.  Business owners are strictly liable for sales to minors.  Placing more responsibility on the server or cashier puts more significance on the need to effectively card.  All too often, we see a terminated staff member walk across the street to get rehired at a competitor, while the business owner is paying expensive fines or serving a suspension of its beer permit or ABC liquor license.

ABC law enforcement reported 130 minor compliance checks and 28 citations for sales to minors at the September ABC meeting. This also reflects a 78% passage rate, industry-wide. The following were reported per license:

92 LBD

20 sold

78% passage rate

18 liquor stores

7 sold

61% passage rate

20 WIGS

1 sold

98% passage rate

ABC law enforcement reported 130 minor compliance checks and 28 citations for sales to minors at the September ABC meeting. This also reflects a 78% passage rate, industry-wide. The following were reported per license:

92 LBD

20 sold

78% passage rate

18 liquor stores

7 sold

61% passage rate

20 WIGS

1 sold

98% passage rate

The ABC has also been targeting curbside sales by restaurants and bars. So far, we have not heard of any delivery compliance checks, but suspect we will see delivery citations forthwith.

All this law enforcement makes us think of Officer by The Pharcyde:

Oh please don’t pull me over officer please

I’m discombobulated (What)

Discombobulated (What)

Discombobulated malfunctioned faded

F-a-d-e-d

I can’t believe it’s me

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Sep 18, 2020

We have heard a steady stream of queries from bar owners about potential lawsuits over the city’s handling of health orders during COVID-19.

Recently retracted news from a local Fox News affiliate reported that the Mayor’s office withheld important health information.

Contradictory information concerning whether the Mayor, in fact, withheld any information quickly emerged.

It certainly looks like Nate Rau covered the story back in early August.  Although the Mayor’s office may have wanted to conceal information, the news was public less than a week after the e-mails in the Fox 17 news report.

That said, there are lawsuits proceeding and bars are obviously free to pursue legal recourse against the city. We personally question whether the city should have imposed different limitations on occupancy for bars and restaurants after it became clear that closing the bars did not resolve social distancing problems on lower Broadway. Socially irresponsible crowds packed downtown restaurants.

Whether this rises to the level of meriting a lawsuit – we are not certain.

In our humble opinion, bars and restaurants should be treated equally: distance tables, require patrons to stay seated, and mandatory masks when patrons enter, leave and walk to the restroom. And the city should have effective enforcement measures to make sure there is a level playing field – including use of the beer board.

In any event, we wish restaurant, bar, hotel and venue owners the best as you navigate these difficult times.